MLB: Only fair for league to get cut from casinos

LAS VEGAS — Major League Baseball and the casino industry are entrenched in their views on a league proposal to get a cut from wagers placed on the sport following the repeal of a federal ban on sports betting earlier this year.

Representatives from both industries vigorously defended what they believe is their right over the money wagered Wednesday during a panel at the casino industry’s top trade show in Las Vegas. MLB and other pro leagues have asked for a percentage of the wagers, and casinos have strongly opposed any direct payments.

Kenny Gersh, MLB’s executive vice president of gaming, told the crowd of casino executives that a proposed 0.25 percent fee — which some have dubbed an “integrity fee” — is essentially a royalty that casino companies should pay if they are going to make money off of the sport. He defended it as a case of “fairness” and partnership with casino operators.

“The state is going to designate these three, four, five very specific licensed entities: You guys get the right to make money from sports betting,” he said. “From a fairness perspective we think, if you are going to designate someone to be able to make money off of what at the end of the day is our sport and our events because if the Yankees weren’t playing the Red Sox last night, you are not betting on the Yankees and the Red Sox … we think we should be involved in that.”

A U.S. Supreme Court decision in May allowed states to legalize sports betting. Sportsbooks have since then opened in New Jersey, West Virginia and other states.

Professional sports leagues have failed so far to convince any state to build the fees into their laws. Nevada, which has offered sports betting for years, does not pay an integrity fee.

“I mean, look, you want a cut of the revenue without any of the risk that’s associated with it,” Sara Slane, senior vice president of public affairs at the American Gaming Association, countered during the Global Gaming Expo. “That’s why we have to go through the regulatory process. We invest billions of dollars in buildings, in our licenses that cost us millions of dollars to go through. You want us to take that risk, pay you and then you are going to benefit on the back end as well. … What you guys are proposing is not financially viable.”

The only thing Gersh and Slane agreed on during the panel is their enemy: Bookies on the corner and illegal offshore betting sites. The American Gaming Association, which is the largest lobbying group for the casino industry, has estimated that at least $150 billion a year is wagered illegally on sports betting in the U.S.